Foree v. Crown Central Petroleum Corp., B--460

Citation431 S.W.2d 312
Decision Date19 June 1968
Docket NumberNo. B--460,B--460
PartiesR. L. FOREE et al., Petitioners, v. CROWN CENTRAL PETROLEUM CORPORATION et al., Respondents.
CourtSupreme Court of Texas

Billy E. Lee, Houston, H. Clayton May, Dallas, James N. Ludlum and James N. Ludlum, Jr., John Davenport, Austin, for petitioner.

Vinson, Elkins, Weems & Searls, W. H. Drushel, Jr., Hosuton, Cable & McDaniel, John S. McDaniel, Baltimore, Md., for appellee.

CALVERT, Chief Justice.

In this suit by petitioners, as plaintiffs, against respondents, as defendants, for damages for unjust discrimination in the purchase of crude oil, the trial court granted respondents' motion for summary judgment and rendered judgment that plaintiffs take nothing. The court of civil appeals affirmed. 417 S.W.2d 499. We reverse the judgments of both courts and remand the cause to the trial court.

The instant case represents one phase of rather lengthy litigation growing out of a complaint filed with the Railroad Commission of Texas by B. A. Duffy charging that respondent, who are common carrier-common purchasers of crude oil as defined by Art. 6049a, Vernon's Tex.Civ.Stats., were discriminating against complainant in the purchase of crude oil. The Commission, after hearing, entered its order on February 21, 1962 directing respondents to extend their pipeline transportation system and to make connection with Duffy's tank batteries. Respondents appealed by filing suit in the 126th District Court of Travis County to set aside the order. The Attorney General answered for the Commission and was joined in his defense of the validity of the order by certain intervenors, including some of the petitioners in the case before us.

A short time after respondents filed their suit, the Attorney General filed a separate suit against respondents in the 53rd District Court of Travis County in which he sought to recover statutory penalties of from $100 to $1000 for each day of discriminatory practices and for a mandatory injunction directing respondents to comply with the Commission's order. Some of our petitioners intervened in this suit and sought an award of one-half of any penalties recovered by the Attorney General and a recovery of actual damages. Respondents filed a plea of privilege to the phase of the suit which sought a recovery of damages and the trial court granted the plea and ordered that phase of the suit transferred to Harris County. The court of civil appeals affirmed. Duffy v. Crown Central Petroleum Corp., 366 S.W.2d 956 (Tex.Civ.App.--Austin 1963, no writ).

Respondents filed a motion for summary judgment with respect to the phase of the suit in the 53rd District Court of Travis County in which penalties and mandatory injunctive relief were sought. The trial court granted the motion and rendered judgment that the plaintiff and intervenors take nothing, but provided that the judgment should not be a bar to their right to re-file if the Commission's order then under attack in the 126th Court should finally be adjudged a valid order. The court of civil appeals affirmed. State of Texas v. Crown Central Petroleum Corp., 369 S.W.2d 458 (Tex.Civ.App.--Austin 1963). We refused writ of error, no reversible error.

After petitioners' suit for damages was transferred to Harris County, the Railroad Commission entered an order on August 21, 1964 withdrawing its former order of February 21, 1962. The withdrawal order was entered upon a finding that Service Pipe Line Company had made a proposal, at the request of respondents, to extend its facilities and connect to the tank batteries of the parties in whose favor the original order was entered. The withdrawal order recited that the purpose of the order of February 21, 1962 had been accomplished and that the matter of extension and connection as theretofore ordered 'now presents only a moot question.' Service Pipe Line Company made the connection on November 1, 1964. Thereafter, respondents' suit in the 126th District Court of Travis County challenging validity of the Commission's original order was dismissed.

Following dismissal of the suit in the 126th District Court of Travis County, respondents, on June 14, 1966, filed their motion for summary judgment in this case in the district court of Harris County. In their amended petition in the suit, plaintiffs, petitioners here, alleged that they were the owners of interests in various producing leases in Haskell County Regular Field, and that Crown Central Petroleum Corporation was a producer and purchaser of crude oil in the Haskell County Regular Field and in the adjoining Sojourner Sand Unit Field in Haskell County. They further alleged that Crown Central was a common purchaser as defined by Art. 6049a and in its purchase of crude oil had discriminated against the plaintiffs in favor of its own production from October 15, 1959 to November 1, 1964. They sought damages of $85,998 measured by transportation charges of 11 cents per barrel for trucking their oil to Crown Central's Teague Receiving Station. Crown Central Pipe Line Company was alleged to be a common carrier of oil produced in Haskell County and a wholly owned subsidiary of Crown Central Pipe Line and Transportation Company which, in turn, was a wholly owned subsidiary of Crown Central Petroleum Corportion.

Damages were sought by the plaintiffs under authority of Sec. 11c, Art. 6049a, which reads:

'When any person, persons, association or corporation is discriminated against by a common purchaser as defined herein in favor of the production of said common purchaser, a cause of action for damages, when such has occurred, shall lie against said common purchaser and said person, persons, association or corporation may bring suit for same in any court of competent jurisdiction in the county in which the damage occurred.'

The trial court's take-nothing judgment was affirmed by the court of civil appeals on the ground that primary jurisdiction to determine the issue of discrimination was conferred upon the Railroad Commission by Art. 6049a, and that in the absence of a final order of the Commission determining that issue the suit for damages could not be maintained. If a final order of the Commission determining the issue of discrimination is prerequisite to the right to maintain all suits for damages for discrimination under Sec. 11c, Art. 6049a, and if no such order exists, the judgments of the courts below should be affirmed. We hold that such an order is not prerequisite to the right to maintain all statutory suits for damages.

The question of whether a Railroad Commission order finding discrimination is prerequisite to a suit for damages as authorized by Sec. 11c, Art. 6049a, has not heretofore been squarely presented to or directly decided by the appellate courts of this state. In support of its decision of the question, the court of civil appeals in this case cited Deep South Oil Co. of Texas v. Texas Gas Corp., 328 S.W.2d 897 (Tex.Civ.App.--Beaumont 1959, writ ref., n.r.e.) and State v. Crown Central Petroleum Corp., 369 S.W.2d 458 (Tex.Civ.App.--Austin 1963, writ ref. n.r.e.). Respondents cite the same cases.

In Deep South, Texas Gas Corporation, a common purchaser of gas, sought a declaratory judgment as to its obligations under a contract to purchase gas from Deep South. By cross-action, Deep South sought cancellation of the contract for fraud and because of discrimination against it in the taking of gas, and because of the discrimination sought damages after the date of cancellation. The court of civil appeals, in discussing the right of Deep South to recover damages because of discrimination, held, broadly, that Art. 6049a and related statutes required that the issue of discrimination be first submitted to the Railroad Commission. 328 S.W.2d 897, at 907--908. Considered in the factual context of the case, the holding, although appearently a dictum, has no application to the facts of this case. Immediately before making the quoted holding, the court pointed out that the discrimination, if any, against Deep South was not the type of discrimination for which Secs. 11c and 11e, Art. 6049a, expressly conferred a right to sue for damages.

State v. Crown Central Petroleum Corp., as heretofore noted, was another phase of the litigation between the parties to this appeal and involved the right of the Attorney General to sue for and recover statutory penalties, to be shared with intervenors, and his right to obtain a mandatory injunction requiring Crown Central to extend its pipeline and connect with Duffy's tank batteries. The summary take-nothing judgment was rendered by the trial court and was affirmed by the court of civil appeals on grounds that (1) no cause of action for penalties and mandamus existed independently of the Commission's order, because the Commission had exclusive primary jurisdiction to determine the issue of discrimination; and (2) no cause of action for penalties and mandamus for refusal to comply with the Commission's order existed, because Crown Central had a right to appeal from the order without being subjected to the heavy penalties and mandamus. 369 S.W.2d 458, at 462--463. Justice Hughes dissented. 369 S.W.2d 955.

From a careful re-examination of the record in State v. Crown Central, we are now convinced that the judgment rendered in that case was erroneous. In no event should a take-nothing judgment have been entered. The reasons for our present conclusion concerning the judgment in State v. Crown Central will be manifest from our discussion of the right of petitioners to maintain their suit for damages.

We find no express provision in Art. 6049a or related statutes which denies to a complainant his statutory right to prosecute a suit for damages in the absence of a final and subsisting Commission order finding discrimination. Indeed, the plain wording of Sec. 11c, Art. 6049a, seems clearly to authorize such a suit without regard to Commission action. If, therefore, an order...

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